Key Benefits of ERP and e-Commerce Integration

Key Benefits of ERP and e-Commerce Integration

Fifty widgets have just been sold through your e-commerce site. That’s fantastic! Oh, wait, here comes a sales order via phone for 75. You should be happy but the problem is the available to sell inventory count for widgets is only 100 because the e-commerce quantities are not updated in real-time. Authorizing and accepting payment from valued customers without the product to fill their order can appear untrustworthy and unreliable. You could fully fill one order and leave the other partial, partially fill them both giving each as much as you can, but either method would leave at least one customer short a portion of their order. You could have an employee go downstairs to the widget aisle of the warehouse to manually count the actual, on-hand number of widgets, but spending time and labor on something the software you purchased should be doing is inefficient and a waste. You have also just realized the packages of widgets, which normally come in sets of 5, now are in sets of 7, and this new product information was only updated in the ERP system and not on the e-commerce site. An employee will have to update this in each order, risking the error-prone manual methods and consequences. With so much demand and high volume orders for widgets coupled with the multiple systems and manual process, you can’t keep up.

Can you give customers what they want, when they want it?

It’s not front page news to say that we live in a demanding, instant gratification world. Customers want the exact product they order to do precisely what it claims to do but, often more importantly, they want their purchase as soon as possible. The success of Amazon Prime, a subscription membership for 2-day shipping among many other benefits, is proof that people are willing to spend money on a monthly basis in order to guarantee an expedited shipping service. (Personally, I have even changed brand of the product I was looking for in order to use my Amazon Prime shipping benefits, despite an overall price increase). Being able to meet the timeline your customers need can make or break their buyer experience, making real-time updating of the orders in the ERP system critical.

Consumer behavior indicates shipping timeframes are vital to customer satisfaction. If you say shipping 50 widgets will require 10 days to ship but you take 12, customer satisfaction will suffer. If missing shipping deadlines become a habit or you develop a reputation for being unreliable in shipping, the likelihood of customer loyalty is very slim. It short, if you can’t keep up with the demand of your customers, they will find another vendor who can.

Bridging the gap means automation

Missing communication and automation between your e-commerce software and ERP system can be bridged manually, but that doesn’t mean it should be. Employees can manually enter data into each and every system but with this comes an increase in labor cost. It takes time to key and re-key information and this can take employees away from other job duties, especially those tasks that require a human element to complete. As more and more orders come in, and inventory is entering and leaving the facility, the more manual processing, data entry and time you will have to sacrifice. All of this costs money.

The other element to bridging the gap between an e-commerce software and ERP system with manual tasks is the increase in errors. With disconnected systems, employees are taking data from one system, and duplicating the entries in another. Duplicating data can lead to miss-types, missed information, data in incorrect windows or accounts, especially when you take into consideration that the person pulling the data from one system may not be the same person who enters it into the other system. The possibilities for manual errors are numerous and costly. If your business makes decisions based on information that has been manually transferred, then you are chancing decisions on inaccurate or erroneous data. For example, if John, while pulling inventory counts from the ERP system to enter into the e-commerce, transposes 1,000 4ft x 4ft glass windows as 100 4ft x 4ft glass windows, your next inventory order is based on seeing 100 windows in your system. This blunder can tie up funds in extra inventory costs and occupy valuable space on your warehouse floor.

Get it right the first time

Because e-commerce relies so heavily on accuracy, having older data can be debilitating. Whether it be on-hand inventory, ATS stock, or up-to-date shipping information, a lack of connected and real-time capabilities risks serious mistakes. For example, if your e-commerce site is not updated when you receive your supply of widgets, your customers would see that you are out of stock and move on to a vendor who does have an automatic inventory system which updates when orders are received. A customer, with recurring orders set up in your ERP system, decided to change the ship-to address for one order. This reflected in the e-commerce software but a lack of automation means the shipping address isn’t updated in the ERP system in time before the shipping labels are printed and the product is shipped out. Sending the product to the wrong address can lead to suffering customer satisfaction.

Integrate, integrate, integrate

The solution to these simple yet costly and aggravating problems is to tightly integrate your ERP and e-commerce systems. When these two systems, both of which are vital to your company’s success, work together and ‘talk’ to each other, these problems can be eliminated. As online order volume increases, the automation of each system can give you more time to complete the orders as well as reducing the number of steps to reach the end goal of providing customers with their products. If you normally have to aggregate orders from the e-commerce system followed by entering them into the ERP system, integrating the two systems can automate this step thus eliminating it from your workflow.

Because the integration of these two systems allows them to communicate, you are no longer responsible for duplicating data into each system. As a result, the man hours spent in data entry are eliminated and labor costs can be subdued. In the same regard, the integration removes the necessity of error-prone manual steps leading to a reduced opportunity for error. From here, it is simple; the fewer errors reaching your customers, the happier they are.

If you don’t have real-time data, you aren’t competitive

Another result of e-commerce and ERP integration is the ability for various modules to operate in real-time. The real-time functionality is key to data accuracy for you and your customers. You will be able to reflect data such as ATS inventory, shipping changes, etc., in real-time without duplicate entry or manual errors. One thing I want to point out in the concept of real-time is that this term is often seen as interpretive. Real-time can mean syncing every 24 hours or syncing every night a Midnight. The most optimal system integration will include real-time as defined by Carillon®ERP which is up-to-the-second real-time data. This method will provide the most relevant and precise data for customers, employees and decision makers while eliminating any waiting period for the information you need.

Integrating your ERP system with your e-commerce allows orders to be automatically associated with the necessary windows in each platform. Eliminating error-prone and costly human intervention allows you to process more orders, faster, and more accurately. When running a business, it is important to take advantage of all the available resources and set yourself up for success.